For Better or Worse, Mick Mulvaney Probably Is the Acting Director of the CFPB

President Trump says that Mick Mulvaney is the acting director of the Consumer Financial Protection Bureau. Outgoing bureau chief Richard Cordray says that his deputy, Leandra English, is the acting director in his stead. Unfortunately, I think this is one issue on which the Trump administration appears to have the better of the argument. I say “unfortunately” because Leandra English is by all accounts committed to the important mission of the CFPB, whereas Mulvaney has derided the bureau as a “joke.” Plus, Mulvaney already has his hands full as director of the Office of Management and Budget, which is not a part-time job. So if I had my way, English would be in charge. Alas, the Federal Vacancies Reform Act of 1998 and the Dodd-Frank Act of 2010 seem to say otherwise.

The controversy over the CFPB centers on two statutory provisions: 5 U.S.C. § 3345 (part of the Federal Vacancies Reform Act) and 12 U.S.C. § 5491 (part of Dodd-Frank). The key language in 5 U.S.C. § 3345 is in subsection (a):

If an officer of an Executive agency . . . whose appointment to office is required to be made by the President, by and with the advice and consent of the Senate, dies, resigns, or is otherwise unable to perform the functions and duties of the office —

(1) the first assistant to the office of such officer shall perform the functions and duties of the office temporarily in an acting capacity subject to the time limitations of section 3346;

(2) notwithstanding paragraph (1), the President (and only the President) may direct a person who serves in an office for which appointment is required to be made by the President, by and with the advice and consent of the Senate, to perform the functions and duties of the vacant office temporarily in an acting capacity subject to the time limitations of section 3346. . . .

The OMB directorship is a Senate-confirmed position (Mulvaney was confirmed by a 51–49 vote in February), so Mulvaney is eligible to serve as acting head under subparagraph (2). (Section 3346 imposes a 210-day cap on the term of an acting director — which obviously is not an issue yet.)

The argument that English, not Mulvaney, is in charge of the CFPB rests on 12 U.S.C. § 5491(b)(5):

There is established the position of Deputy Director [of the Consumer Financial Protection Bureau], who shall —

(A) be appointed by the Director; and

(B) serve as acting Director in the absence or unavailability of the Director.

If the phrase “absence or unavailability” includes a vacancy caused by the director’s resignation, then 12 U.S.C. § 5491(b)(5)(B) would seem to suggest that English should serve as acting director until a successor has been confirmed.

One question is whether “absence or unavailability” includes a vacancy resulting from resignation. Usually, when a student says he will be “absent” from class next week, I assume he’ll be back the week after. If a colleague tells me that she is “unavailable” to meet this afternoon, I don’t assume that she is leaving academia or taking emeritus status. Cordray, by contrast, is gone from the CFPB for good.

But the pro-English camp has stronger support from dictionary definitions, if not from everyday usage. Webster’s defines “absence” as “a state or condition in which something expected, wanted, or looked for is not present or does not exist.” As a result of Cordray’s resignation, we are in a state or condition in which a director of the CFPB “does not exist” — i.e., is absent. The pro-English camp’s interpretation of “absence” is, at the very least, a plausible one.

The next question is whether the Dodd-Frank Act trumps the Federal Vacancies Reform Act. Over at the Take Care blog, Brianne Gorod says “yes,” based in part on the interpretive canon that “the specific governs the general.” But there’s more to 12 U.S.C. § 5491 that, I think, cuts against the pro-English camp’s textual argument.

Specifically, subsection (a) of 12 U.S.C. § 5491 says that:

Except as otherwise provided expressly by law, all Federal laws dealing with public or Federal contracts, property, works, officers, employees, budgets, or funds, including the provisions of chapters 5 and 7 of title 5, shall apply to the exercise of the powers of the Bureau.

The Federal Vacancies Reform Act is a “Federal law[] dealing with . . . officers.” So the question is whether Dodd-Frank or any other statute “provide[s] expressly” that the Federal Vacancies Reform Act shouldn’t apply to the CFPB. Perhaps 12 U.S.C. § 5491(b)(5)(B) implies that it, and not the Federal Vacancies Reform Act, should govern in the event of the director’s departure. But “expressly” means “directly, firmly, and explicitly.” And the Dodd-Frank Act does not directly, firmly, or explicitly say that the Federal Vacancies Reform Act is inapplicable to the CFPB.

I think that more or less resolves the question. But perhaps the pro-English camp might argue that even though the text of the Dodd-Frank Act does not provide “expressly” that 12 U.S.C. § 5491(b)(5)(B) trumps the Federal Vacancies Reform Act, the legislative history of Dodd-Frank supplies the necessary express provision. As Adam Levitin writes at Credit Slips:

The version of the Consumer Financial Protection Act that originally passed the House was very clear that the [Federal Vacancies Reform Act] applied. It stated that “In the event of vacancy or during the absence of the Director (who has been confirmed by the Senate pursuant to paragraph (2)), an Acting Director shall be appointed in the manner provided in section 3345 of title 5, United States Code.” Section 3345 of title 5 is the [Federal Vacancies Reform Act]. The quoted language didn’t make it into the enacted version of the legislation. Instead, the conference committee that reconciled the House and Senate bills adopted the language in the Senate bill, about “absence or unavailability.” In other words, Congress knew very well how to say that the [Federal Vacancies Reform Act] applies … but ultimately decided that it would not apply. To my mind, this legislative history resolves any ambiguity about whether the Consumer Financial Protection Act’s language qualifies as an express provision opting out of the [Federal Vacancies Reform Act] succession line.

That’s a strong argument (assuming one thinks, as I do, that it’s entirely legitimate for courts to consult legislative history when interpreting statutes). But there is legislative history pointing in the opposite direction as well. The initial House and Senate bills did not include the “[e]xcept as otherwise provided by law” language. That, too, came in as part of the conference report. The accompanying explanatory statement said:

Title X establishes the Bureau of Consumer Financial Protection (Bureau), which will be an independent bureau within the Federal Reserve System. It will be run by a Director who is Presidentially appointed and Senate confirmed. The Bureau will have the authority and accountability to ensure that existing consumer protection laws and regulations are comprehensive, fair, and vigorously enforced.

Giving effect to the Federal Vacancies Reform Act here is consonant with the conference committee’s wish that the CFPB be “run by a Director who is Presidentially appointed and Senate confirmed.” Mulvaney has those attributes; English does not.

Note that none of this casts doubt on whether Congress could, if it wanted to, provide that in the event of a principal officer’s resignation, the vacancy should be filled temporarily by an inferior officer who is not herself presidentially appointed or Senate confirmed. As Gorod notes, other agencies have statutes that do exactly that. I am unaware of any suggestion prior to the Mulvaney-English episode that such statutes infringe upon the President’s Appointments Clause power.

One final note: For those (like me) who favor English as CFPB chief as a matter of politics and policy, remember that in administrative law as in many other domains, what goes around comes around. The interpretation advanced here makes it easier for President Trump to replace an Obama administration veteran with his own pick at the CFPB, but so too will it be easier for President Biden/Booker/Gillibrand/Harris/Sanders/Warren to replace a Trump administration veteran with his/her own choice at the CFPB come 2021. That, of course, assumes that the CFPB survives until 2021. But given the GOP’s trouble in repealing the Affordable Care Act, I’m increasingly optimistic about the bureau’s long-term future — even though I’m pessimistic about its interim chief.

[Addendum: Oddly, the Justice Department’s Office of Legal Counsel does not mention what I think is the most relevant language in 12 U.S.C. § 5491(a) — “[e]xcept as otherwise provided expressly by law” — in its memo supporting the President’s decision to name Mulvaney as acting CFPB chief. Instead, OLC focuses on the legislative history of the Federal Vacancies Reform Act, which — as Marty Lederman points out over at Balkinization — is not nearly as conclusive as the OLC seems to think. I’m perplexed as to why OLC didn’t seize on the § 5491(a) argument emphasized here. Perhaps the argument does not seem as strong to others as it did to me. Or perhaps the very smart lawyers at OLC simply missed it.]

3 thoughts on “For Better or Worse, Mick Mulvaney Probably Is the Acting Director of the CFPB”

If the President were to demur that the Deputy Director became the Acting Director upon the Diector’s resignation, could the President not still remove her? The Acting Director cannot possibly enjoy the good cause tenure protections of the Director – otherwise a successor could not be nominated and confirmed. Without tenure protection, would she not be subject to removal? And then, absent either Director or Acting Director, the Federal Vacancy Act more clearly controls, and the President could name an Acting Director of his choosing. (Perhaps Ms. English should name a new Deputy first thing Monday morning.).

This seems somewhat less than convincing. The proposition that section 5491(a)’s “Except as otherwise provided expressly by law” trumps 5491(b)(5)(B)’s succession provision rests on the assumption that in order to get around 5491(a)’s blanket provision, any exception must specifically identify each and every Federal law that does not apply. In other words, 5491(b)(5)(b) should have stated — at least according to this argument — that the FVRA (as well as any other potentially applicable laws) would “not apply” to the succession issue. But the alternative interpretation for 5491(a)’s language is at least as plausible: where expressly provided by the law creating the Bureau — including, most notably, the very provision of 5491 at issue here — “expressly provides” for a different procedure, other “Federal laws dealing with public or Federal contracts, property, works, officers, employees, budgets, or funds” are necessarily overridden.

And stepping back to an overview of the legislative process, the latter interpretation makes far more sense: in drafting the Act, the legislators could hardly be expected to compile a list of each and every potentially applicable Federal law that might have to be “expressly” identified and overridden in order to create the Bureau. It would make far more sense to draft the Act with the specific provisions necessary to give it the powers and limitations that the drafters had in mind, while including 5491(a) as a “gap-filler” provision providing, in effect, that where the Act did not address a particular issue, general Federal law would apply.

In short, to the extent that 5491(b)(5)(B) “expressly provides” for a certain succession process, the background Federal law, including the FVRA, is not applicable.

Rats: there does not appear to be an editing function here. “But the alternative interpretation for 5491(a)’s language is at least as plausible: where expressly provided by the law creating the Bureau — including, most notably, the very provision of 5491 at issue here — “expressly provides” for a different procedure, other “Federal laws dealing with public or Federal contracts, property, works, officers, employees, budgets, or funds” are necessarily overridden” should have read “But the alternative interpretation for 5491(a)’s language is at least as plausible: where the law creating the Bureau — including, most notably, the very provision of 5491 at issue here — “expressly provides” for a different procedure, other “Federal laws dealing with public or Federal contracts, property, works, officers, employees, budgets, or funds” are necessarily overridden.”